A summary of the operations of Streuling Company for the year ended May 31, 2012, is shown below.

Required:
1. Determine the net income for the year by preparing an income statement. (Assume that 3,000 shares of stock are outstanding.)
2. Interpretive Question: Assuming an operating loss for the year, is it a good idea for Streuling to still pay its shareholdersdividends?

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S 12,400 37,820 Retained earnings (6/1/11) 156,540 21,180 115,100 7,250 Dividends Advertising expense . … Supplies expense Rent expense S 2,760 [リ 1,500 Income taxes 18,150 osuing fees 4,170 Administrative expense Miscellaneous expense